* Asian stocks up, Australia hits five-year high
* Yen broadly softer as risk appetite improves
* European shares seen opening higher
By Ian Chua
SYDNEY, Oct 28 Asian stocks rose on Monday with
Australia scaling a five-year peak after a record high finish on
Wall Street helped offset worries about tighter credit in China,
while investors gave the safe-haven yen a wide berth.
MSCI's broadest index of Asia-Pacific shares outside Japan
rose 0.8 percent, recovering a chunk of last
week's 1.1 percent loss -- the biggest in two months -- that was
driven by concerns that China may tighten monetary policy to
keep prices under control.
European shares were seen opening higher with financial
spreadbetters expecting gains of around 0.3-0.5 percent for
Germany's DAX, France's CAC 40 and Britain's
"Yet more gains in the U.S. on Friday and a positive
handover from Asia are set to fuel the bulls on the European
open," Jonathan Sudaria, trader at London Capital Group, said in
a trading note.
Japan's Nikkei climbed 2.2 percent, clawing back
most of Friday's 2.7 percent drop, while Australian shares
put on 1.0 percent to end at a five-year high.
Hong Kong's Hang Seng lagged, adding a modest 0.6
percent, and mainland Chinese stocks were flat,
highlighting underlying concerns about China's attempts to cool
consumer inflation and runaway property prices.
"The focus this week will be earnings, China's money rates
and the PMI number at the end of the week," said Jackson Wong,
Tanrich Securities' vice-president for equity sales.
"Flows are quite slow today and investors will likely stay
on hold for the rest of this week with so much China policy
uncertainty at this point," he added.
Last week, China's money rates shot up to their highest
since June's dramatic cash crunch. They retreated a touch on
Several markets in Asia are closed for public holidays on
Monday, including New Zealand and the Philippines.
RISK IN PLAY
With risk appetite on the mend for now, demand for the
safe-haven yen waned. That saw the Australian dollar gain 0.7
percent to 93.77 yen, and both the euro and dollar
edged up 0.2 percent to 134.76 and 97.65
Against the dollar, the euro was steady at $1.3802
and within striking distance of Friday's two-year high of
The dollar has been under broad pressure in the past few
weeks on growing expectations the Federal Reserve will maintain
its massive stimulus programme into next year.
The Fed's policy-setting arm, or Federal Open Market
Committee, meets on Oct 29-30 and is expected to hold off on any
move to scale down its $85 billion monthly bond-buying
Analysts believe policymakers want to see the impact of the
U.S. budget battle that took the country to the brink of a debt
default and caused a partial government shutdown.
"The FOMC should be a non-event... the Washington debates
cloud the growth outlook, so forget about tapering," analysts at
JPMorgan wrote in a client note, adding the April 2014 meeting
looked like the soonest any tapering would be announced.
In contrast to equities, commodities were more subdued with
copper 0.2 percent lower at $7,174 a tonne, while U.S.
crude oil slipped 0.2 percent to $97.64 a barrel.
Spot gold was a touch softer at $1,350 an ounce, but
not far off a five-week high of $1,355.20 set Friday.